Question

Determine which of the following is true about gross profit (gross margin).
True
False

Answer 1

Gross profit, also known as gross margin, is a measure of a company's profitability that shows how much money is left over after subtracting the cost of goods sold (COGS) from the total revenue.

Step-by-step explanation:

Gross profit, also known as gross margin, is a measure of a company's profitability that shows how much money is left over after subtracting the cost of goods sold (COGS) from the total revenue. It can be calculated using the following formula:

Gross Profit = Total Revenue - COGS

For example, if a company has a total revenue of $1,000 and COGS of $500, its gross profit would be $500.

Therefore, the statement 'Gross profit is a measure of profitability that shows how much money is left after subtracting COGS from total revenue' is true.